Realtors, businessmen talk Columbia’s growth

William Fruth’s explanation of how strong economies work started simply enough — with a bucket and baseball. However, when trees and grass were added to the picture, his suggestions for developing a strong economy became a complex issue.

Fruth, president of POLICOMInc., an economics research firm in Palm City, Fla., spoke at 9 a.m. Friday to an audience of mostly real estate agents at Elks Lodge. He recalled his years as the mayor of Tiffan, Ohio, when the city was in economic decline. Fruth said he asked a politician the source of Tiffan’s economic problems and was told, “There’s a hole in the bucket.”

Money goes into a community like it goes into a bucket, according to Fruth, and the hole in the bucket represents money leaving the community. The wealth of a community is constantly drained as money leaks out of the hole.

“Primary” or “contributory” industries are needed to prevent money from leaving, Fruth said. Employers in these industries, such as farming, manufacturing, transportation and mining, import wealth back into a community by generating money from other areas, rather than taking money from residents.

Retail, services, local government and construction are types of industries or institutions that create a hole in the bucket, Fruth said. They consume the wealth of an area rather than generate wealth from other areas to put back into the bucket, he said.

The assumption that creating any type of job helps the economy is a myth, Fruth said, which he relayed in baseball terms.

When it comes to batting averages, he said, adding more players to a team is not necessarily good if there are weak links because they bring down the overall average. Instead, it is better to have fewer people with higher averages.

Boone County’s annual wages ranked 272 out of 361 Metropolitan Statistical Areas in 2004, according to data by POLICOM. In 1995, the annual wages ranked 170. Overall, economic strength of Columbia went from 44 in 1995 to 130 in 2006.

Fruth encouraged the audience to think of their city as a business with something to sell and market. He emphasized geographical assets, such as land, that a company could use to be profitable.

Cost, time and community attitudes are the three main reasons a company does not choose to develop in a community, Fruth said. To attract businesses, Fruth said, cities should welcome developers without making the process time-consuming and costly.

Even with Fruth’s suggestions for building a stronger economy by drawing in “primary” industries, the issue of preserving green space still remains.

During the question-answer session after Fruth’s presentation, one man said land should be used for people to walk around in for parks.

“Lots of people want to stop growth,” said David Brockhouse, a 40-year-old real estate agent. “They want (Columbia) to be a town instead of a city. People want green space; there can be equal value of green space and economic growth.”

Brockhouse said zoning regulations in Columbia are depressing.

“Everyone I talked to ... came out with a depressed feeling,” he said. Columbia doesn’t want to zone for industrial purposes, he said.

To 49-year-old builder Jack Bruns, “Columbia is doing all the wrong things.” He said industrial developers have to go through many “hoops,” which make Columbia less attractive to developers.

Although Columbia is drawing in retirees, the city needs to focus on becoming a place of economic growth, not just population growth, said Roger Gadbois, a flooring subcontractor.

Vicki Curby, a planning and zoning commissioner, said the city and county need to get together for planning and implementing.

“What we’re getting all of the time is residential and commercial zoning,” she said. “We need to create more opportunities for primary industries.”

Land hasn’t always been developed as planned though.

For instance, City Councilman Jerry Wade said, “there was a considerable amount of industrial zoning on Range Line; however, because of market conditions much of that has been rezoned for commercial purposes.”

“I think it’s more of a consideration of how that land can be developed and marketed,” Wade said. “It’s if someone is interested in commercial use for it and will buy it.”